• New Energy Beacon tool ranks suppliers by energy content with 95% accuracy
• Case study for one shipowner shows potential saving of $2.8 million on bunker bills
• Singapore currently has 7.1% energy content difference between best and worst VLSFO supplier

Differences in energy content between suppliers deliver significant variations in voyage costs. Image Credit: Shipergy

A vessel bunkering in Singapore could spend $50,000 more on a single voyage to Rotterdam - not because of price, but because of which supplier it chooses.

Tech-led marine fuel trading firm Shipergy has built a tool called Energy Beacon that makes this invisible cost visible, giving buyers a ranked view of supplier energy quality before they commit to a stem.

Marine fuels, in particular VLSFO, are blended products that can contain an array of different feedstocks, meaning the energy content of a tonne of fuel can vary widely depending on which supplier it is bought from.

Shipergy's new Energy Beacon service seeks to provide a simple way for buyers to compare the energy content of the different fuels on offer.

"This product is finally landing in a market that needs it," Daniel Rose, CEO of Shipergy, said in an interview with Ship & Bunker.

"We've been working on it for a long time, and I've been talking about the underlying problem for years, but it's only now that buyers are ready to act on it."

"The basic problem is that energy content can vary between 5-10% depending on where it's being sold and who is selling it."

Historical data from Energy Beacon in December showed of the various VLSFOs on offer in Rotterdam there was a 6% difference between the highest and lowest energy content. The difference was 6.5% in Singapore, 2% in Houston and 3.2% in Fujairah.

"It means that companies are leaving a lot of value on the table, potentially, if they are not looking at the energy content," Rose said.

"What this product does is it really shines a nice light on what's out there and what the differences are, and what that means for the efficiency of your vessel."

How it Works

Shipergy has built up a large historical dataset of bunker data which it uses to predict the energy content of the various fuels offered by different suppliers at a port.

"Because we have such a large archive of fuel energy content data, we've built a machine learning-based model, which is every day pulling in the data, digesting it and then predicting forward," Rose said.

"In the main ports we're about 95% accurate in terms of energy ranking, so we're able to say with really good confidence in the main ports which supplier is going to have the best energy content."

Shipergy is conscious that a machine learning claim in a conservative industry needs evidence.

Before commercialising Energy Beacon, Shipergy commissioned an independent data scientist to validate the model's performance on 10,374 real predictions across 1,341 ports in 131 countries. The review found ranking accuracy of 95% in main ports and a 95% confidence interval of plus or minus 0.024 MJ/kg, equivalent to a pricing uncertainty below $0.30/mt.

Energy Beacon is a separate revenue stream for Shipergy beyond its normal business of trading bunkers. The product is paid for via annual subscription, but free users can view the expected energy spread in the main bunkering locations globally.

Case Study

The firm has demonstrated significant potential savings to one shipowner.

Last year Shipergy was given testing results for their fuel purchases for the previous 12 months. The purchases were from deliveries at 76 ports, totalling about 200,000 mt of fuel.

"If they had been using our product, they would have saved more than $2.8 million in energy alone, before we consider EU ETS savings etc," Rose said.

"They would have seen an average energy improvement of 1.34 MJ/kg.

"Energy Beacon will now form an important part of their bunker procurement benchmarking
process going forward."

Worked Example

Image Credit: Shipergy

To put some numbers around this, consider a vessel bunkering in Singapore before heading to Rotterdam.

Energy Beacon is currently showing a 7.1% spread in energy content between VLSFO suppliers in Singapore. A ship that picks the wrong supplier on that stem would burn around 59 more tonnes of fuel on the voyage. At current prices of about $700/mt, that is roughly $41,300 more in fuel cost alone before the vessel has even reached its destination.

But the cost does not stop there.

Those extra 59 tonnes of fuel generate approximately 183 additional tonnes of CO₂, meaning the vessel would need to procure 183 more EU Allowances.

At current EUA prices of about $85 per tonne, and with EU ETS applying to only 50% of this voyage given one European leg, the additional compliance cost comes to around $7,800. The lower-energy
fuel also tips the vessel into non-compliance under FuelEU Maritime, while the higher-energy option keeps it safely within the threshold.

"The total difference between the two suppliers on that single voyage is $49,098," Rose said.

"Same port. Same price per tonne. Different supplier."

Benchmarking Change

The idea of addressing varying energy content in marine fuels is not a new one, and has been discussed in the industry for several years.

The key challenge for a service addressing this topic is in persuading a conservative shipping industry to change its habits.

Bunker buyers are typically judged by their ability to purchase fuel at a discount to marine fuel price indexes, with little thought given to the quality of product they have purchased.

This may change in an era of much higher bunker prices, and in one where increased bunker consumption also incurs increased compliance costs for the GHGs emitted. Rose is optimistic that the industry is ready for a change in how it benchmarks its performance.

"I really hope so," he said.

"Owners and charterers sit at different distances from this problem. Owners carry the regulatory exposure, so higher energy content fuel directly helps their CII and FuelEU scores.

"Charterers see it in voyage economics, less fuel burned means more tonne-miles per stem, which matters on their bottom line.

"Owners are engaging with this faster, but charterers are getting there.

"For an industry that has long measured procurement success in dollars per tonne, Energy Beacon represents a fundamental shift in how fuel value is calculated.

"The energy content gap has always existed, what is new is that buyers can now see it before they buy."